Sunday, 29 May 2016

Newbuy scheme launched to back 95% mortgages

A mortgage indemnity scheme to help people buy new homes will be launched today.

Newbuy will help as many as 100,000 buyers obtain a 95 per cent mortgage to buy a new build property.

Under the scheme participating house builders will pay 3.5 per cent of the sale price from their homes into a fund. The government will put in extra support to bring the fund up to 9 per cent of the sale price.

Lenders who are signed up to the scheme will be able to recover funds if a buyer defaults on payments and the value of the property doesn’t cover the mortgage. The house builder’s contribution will be liable first, with the government only forced to step in if this is insufficient.

The scheme was announced in the Laying the foundations housing strategy in November. At the time the government said seven major lenders and around 25 house builders had agreed ‘in principle’ to take part. An update on this is expected later today.

The scheme will boost housing construction and provide 50,000 jobs, representatives from the construction industry have said.

Newbuy has been designed by the Home Builders Federation and the Council of Mortgage Lenders, with support from the government in the form of the guarantee.

Stewart Baseley, executive chairman of the HBF, said: ‘Newbuy will help thousands of people to meet their aspirations to buy a new home, freeing up the housing market and helping first time buyers and those unable to take the next step on the ladder.

‘The scheme will also provide a vital kick-start for house builders large and small who will be able to build the homes and create the jobs that the country desperately needs.’

Readers' comments (13)

Comments are only open to subscribers of Inside Housing

Already a subscriber?

If you’re already a subscriber to Inside Housing, your subscription may not be linked to your online account. You can link your subscription from within the My Account section of the website and clicking on Link My Account.

Not yet a subscriber?

If you don't yet subscribe to Inside Housing, please visit our subscription page to view our various subscription packages.

Have your say

You must sign in to make a comment

sign in register

Newsletter Sign-up



  • New jobs website launched

    15 April 2016

    Inside Housing has relaunched its jobs website with a new easy-to-use platform and more vacancies than ever before.

  • Labour homeownership review launched

    4 February 2016

    John Healey will officially launch the Labour-commissioned Redfern Review into homeownership today.

  • Cap would force 95% to wind up schemes

    21 January 2016

    Ninety five per cent of supported housing providers would be forced to wind up housing schemes for the most vulnerable if a planned benefits cut went ahead, an exclusive survey has revealed.

  • PRS licensing scheme launched in Wales

    23 November 2015

    The Welsh government has today launched a private landlord registration and licensing scheme.

  • Inquiry launched into low-cost housing

    3 November 2015

    A Westminster inquiry has been launched into the effectiveness of government policies aimed at delivering low cost housing.

IH Subscription